The twin pillars of China's growth momentum

Editor's note: Xin Ge, a special commentator on current affairs for CGTN, is a research fellow at the Institute of Public Policy and Governance, Shanghai University of Finance and Economics (SUFE), and an associate professor at the School of Public Economics and Administration, SUFE. The article reflects the author's opinions and not necessarily the views of CGTN.

High-quality development remains a key focus of China's economic priorities for 2025, with an emphasis on boosting domestic demand, which includes unlocking consumption potential, and ensuring employment stability. This is the blueprint that emerged from the annual Central Economic Work Conference in Beijing on December 11 and 12.

The stage for this was actually set in September, when the Political Bureau of the Central Committee of the Communist Party of China reaffirmed its commitment to advancing reform and opening up, fostering domestic demand, and optimizing economic structures. The meeting underscored the necessity of intertwining consumer-driven growth with improvements in public welfare, particularly by raising incomes for low- and middle-income households and upgrading consumption patterns. It also called for nurturing new consumer formats, protecting basic livelihoods, and focusing on employment opportunities for young people, rural migrants and recent graduates.

A series of targeted and coordinated policies have since been issued to construct a resilient and inclusive economic ecosystem. The aim is to energize economic development and inject fresh momentum into growth by reinforcing the twin pillars of domestic demand expansion and employment stabilization.

Consumption serves as a critical link between economic development and people's livelihoods. In the first three quarters of 2024, total retail sales of consumer goods reached an impressive 35.36 trillion yuan, representing a year-on-year growth of 3.3 percent. This steady upward trend underscores the effectiveness of the policies designed to expand domestic demand and stimulate consumption, highlighting the resilience of China's vast market and the untapped potential for growth.

To enhance consumption, policies were introduced in March and July to accelerate the replacement of outdated consumer goods with new ones. The State Council issued guidelines for high-quality development of service consumption, and measures were released to create new consumption scenarios and cultivate new growth points in consumption. Local governments have tailored implementation guidelines to reflect local needs, expanding the range of subsidized products, enhancing subsidies, simplifying application procedures, and boosting consumer enthusiasm.

Consumption promotion activities have also yielded impressive results. In November, the Ministry of Commerce partnered with five international consumer center cities – Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing – to launch the China International Consumer Center City Quality Consumption Month in Shanghai. Collectively, these cities account for over 13 percent of national retail sales, host 32 percent of China's time-honored brands, and facilitate more than 50 percent of consumer goods imports. This initiative showcased their leadership role in driving consumption and fostering innovation.

The month-long event aimed to enhance the consumption structure through dynamic activities, with innovation in consumption scenarios and formats so that greater market vitality would be unlocked and consumer confidence elevated.

While consumption remains a key driver of growth, employment stabilization is the other critical pillar of China's economic strategy. In the first quarter of 2024, over 10 million new urban jobs were created, reducing the surveyed urban unemployment rate to 5.1 percent in September – a 0.2 percentage point drop from the previous month.

The government has also taken comprehensive support measures to reduce labor costs and encourage job retention. For instance, the continuation of a 1 percent phased reduction in unemployment insurance rates saved enterprises a total of 130.9 billion yuan during the first three quarters of the year. Simultaneously, 20.4 billion yuan in job stabilization funds was disbursed through an automated "no application required" mechanism, benefiting more than 2 million enterprises and supporting over 56 million employees.

Targeted initiatives are also addressing challenges in youth employment, a demographic often vulnerable to economic fluctuations. A one-time job expansion subsidy has been introduced to incentivize enterprises to hire college graduates and unemployed youth aged 16 to 24. Enterprises hiring eligible young workers can receive up to 1,500 yuan per new hire. This year alone, 900 million yuan in subsidies benefited 170,000 enterprises, facilitating employment for 620,000 young people.

Moreover, the rise of digital technology and artificial intelligence has diversified employment opportunities, paving the way for new career paths. In early 2024, the Ministry of Human Resources, in collaboration with other departments, launched the High-Skilled Leading Talent Cultivation Plan to develop more than 15,000 leading talents over three years and create about 5 million high-skilled jobs. By investing in the workforce of the future, China is ensuring that its labor market remains dynamic and competitive in an increasingly technology-driven global economy.

With the twin objectives of expanding domestic demand and stabilizing employment, China's central and local governments, industries, and departments are working in unison to unleash the economy's full potential. These efforts underscore unwavering commitment to high-quality development, prioritizing inclusive growth and long-term resilience. As these policies take effect, they will not only lay the foundation for economic stability but also pave the way for a more dynamic, innovative, and equitable future.

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